Whether a member of a limited liability partnership (LLP) can be a protected whistleblower under the Employment Rights Act 1996 ERA was recently considered by the UK Supreme Court.
The whistleblower was initially employed by a UK law firm to develop a joint venture with a Tanzanian law firm. Following a merger she became a member of the LLP which took over the Tanzanian joint venture. Shortly afterwards, she reported to the LLP that the managing partner of the Tanzanian law firm had admitted paying bribes to secure work and to secure the outcome of cases.
As a result of that disclosure, she claimed to have suffered a number of detriments which formed the subject of her claim.
The LLP disputed her claim and took the preliminary issue that as a member of the LLP she was not a “worker” within the meaning of the ERA.
The Supreme Court overturned the lower court by deciding that a fairly oblique sub-section in the enabling Limited Liability Act 2000 did not preclude a member of a LLP, who was “under a contract personally to perform any work or services,” from being a worker entitled to extended whistleblowing protection.
The leading judgment issued on May 21 (available here in pdf) stated:
That conclusion is to my mind entirely consistent with the underlying policy of those provisions, which some might think is particularly applicable to businesses and professions operating within the tightly regulated fields of financial and legal services.
However, the Supreme Court differed, and perhaps, unhelpfully left undecided, a question “of some complexity and difficulty,” namely whether a partner in a conventional partnership could be a protected whistleblowing worker within the ERA (previously decided cases suggest that a partner cannot be treated as an employee of a partnership).
It’s unhelpful, for having recognized the policy imperatives, there should be no uncertainty over what is an important issue for partners who might require whistleblowing protection. If the issue had been decided or had been the subject of a firm indication, the uncertainty could have been resolved one way or the other.
As matters currently stand there would appear to be a significant gap in the potential whistleblowing protection afforded to partners in UK firms that requires urgent amending legislation.
Alistair Craig is a commercial barrister practicing in London.